A provision in a life insurance policy where the policyholder can assign rights to the policy as collateral for a loan or some other debt, either with the life insurance company or with another lender. Assignment allows the creditor/lender to hold some or all of the death benefit of the policy as collateral until the loan is repaid in full. If the insured dies before the loan or debt is repaid, the lender receives either a portion or all of the death benefit to satisfy the repayment of the loan.
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